EU regulators warn of risks in crypto market

The European Union's securities watchdog said on Tuesday that gamers have been introduced to a new generation of retail investors who may not know there are few protections in assets like cryptocurrencies.

Gamification refers to using smartphones to trade, a trend that took off on Wall Street during the coronaviruses epidemic, and has spilled over into European markets.

Verena Ross, chair of the European Securities and Markets Authority, told a Financial Services Conference that investors should engage more in financial markets and not just keep their money under the mattress.

She said that gamification can lead to a lot of risks, creates speculation and leaves investors not aware of the protections when trading markets likecryptocurrencies.

The spread of unauthorised trading advice is part of the social media and the bloc is due this year to revamp its retail investor strategy to reflect the rise of digital finance, Ross said.

"We are looking at ways to raise awareness and warn investors what they are letting themselves in for," Ross said.

The bloc has proposed banning payment for order flow in the retail market.

EU regulators have to balance protecting investors and allowing retail investment to flourish in a region that has long favoured savings products.

The push to deepen its capital market to encourage companies to raise funds by issuing shares rather than relying on banks is made more urgent by Britain leaving the EU.

A senior official in the European Commission's financial services unit, Alexandra Jour-Schroeder said cumbersome listing rules will be reformed as the bloc lags behind other jurisdictions in helping companies raise funds on markets.

Francesco Ceccato, CEO of Barclays Europe, said more was needed to harness huge savings in the EU to green the economy.

We need to get more political support for something that can be a bit radical in some places. Ceccato said that it was important to create an equity culture in the EU.